With soaring youth unemployment, and close to 5 million people out of work overall, one would assume that the last problem Spain would encounter would be that it can’t find workers to fill open jobs.
However, as Bloomberg reports, Spain is facing labor shortages as employers struggle to find capable employees. “We were looking for people for two months. We managed to find one in Spain. We turned to Argentina for others” explains Samuel Pimentel, a headhunter who was searching for specialist consultants for a client.
Pimentel’s client asked for a list of candidates trained in”Agile” project management techniques for helping companies boost their productivity by using more IT systems. The client was even willing to pay $220,000 a year, almost 10 times the average salary in Spain, but Pimentel had a difficult time identifying candidates.
The main reason for this issue according to Valentin Bote, head of research at Randstad, a recruitment agency, is that the unemployed lack the skills to fill the available positions.
“It’s a paradox. The unemployment rate is too high. Yet we’re seeing some tension in the labor market because unemployed people don’t have the skills employers demand.” Bote said.
Companies are struggling to fill positions such as software developers, mathematical modelers, geriatric nurses and care workers. Although the unemployment rate is close to 20%, Randstad estimates that companies may struggle to fill almost 2 million posts through 2020.
Spain has had seven different education laws since 1978 according to Bloomberg, but none have addressed fundamental problems that have led to a high-school dropout rate that is twice the European average. “Education and work exist in two alternative worlds that don’t really connect. While in other nations, like the US, college education is designed to get you a job, that’s not the case in Spain.” said Sandalio Gomez, a professor at the IESE Business School in Madrid.
We would argue that the US education system isn’t really designed to get students jobs per se, but we’ll save that topic for another day.
In Prime Minister Mariano Rajoy’s election manifesto, the People’s Party vowed to put more emphasis on technology in schools and get more students to learn English, but this issue has been decades in the making.
Even when senior posts are filled, Spanish companies are having to make due with lower-caliber candidates than their competitors in other European countries, and that hurts the profitability and resilience of companies the Bank of Spain said in its 2015 annual report.
Spain’s output is struggling to get back to its 2008 peak, and the skills gap is hindering the economy’s ability to get back to that level.
One thing to point out after discussing all of this is that while Spain’s youth unemployment soars, and a significant skills gap puts a drag on the economy, Spanish bond spreads are actually… tightening. Isn’t it amazing what can happen with a little bit of ECB magic to hide any fundamental issues in European economies – for now.
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Of course, there could be another reason why they cannot fill job vacancies… no one ‘wants’ to work when the welfare state is sustaining your lifestyle (in return for your votes?)
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